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Enough Already

Mayor Laura Miller says, with a laundry list of needs and major tax hike ahead, the city needs to mind its purse.

The only way to understand government money is to think of it as your own. Which, by the way, it is. So let's pretend. There's this guy you don't owe any money to, but he'd like some money from you. Couple grand.

Imagine yourself thinking this: "I don't really owe him the two grand, but he's a great guy, and it sure would make him happy. So I guess I'll just go ahead and be a nice person and give it to him anyway."

I can imagine two circumstances under which I might think like that. 1) The guy has some badly compromising photographs of me. 2) The guy is my brother-in-law; he's unemployed; he's suffering from a debilitating illness; he was robbed recently; my wonderful sister whom I love and trust is begging me to help him; and he has some badly compromising photographs of me.

Here is why I raise the point. Assistant Dallas City Manager Ryan Evans is pushing the city council to give a $3 million subsidy in city tax money to some people who are building a 20-story luxury condo tower on one of the most desirable pieces of land in the city, in the Uptown District at Haskell Avenue and Central Expressway, two miles north of downtown.

We are not legally bound to give them the $3 million, and these incentives the city gives away are supposed to induce people to develop in bad areas, not the hottest real estate in town, which people are competing to get to and develop. It's like dropping a Christmas basket off at Mark Cuban's house.

But Evans is pushing the council to give the developers the $3 million in city money anyway, because he says they're good guys, and it would make a statement about the way City Hall does business.

The main player in the development deal is Neal Sleeper, who has turned a wasteland into a wonderful neighborhood, including West Village and all of the stylish new condo and apartment development in that area. Everybody agrees he is a good guy.

But come on! Three million bucks, and City Hall doesn't owe it? Give it to him anyway? City Hall? City Hall, that can't afford to mow the grass? Can we talk about this?

Mayor Laura Miller has suggested the city should hold back on giving this $3 million subsidy to Fairfield Residential LLC, which wants to build the condo tower on land it will buy from Sleeper's Cityplace Co. Mayor Miller says she's not mad at Sleeper.

"I think he is a great guy," she said on the phone the other day, "and every time I see him I'm happy to see him, and I think he's done a super job. But it doesn't matter who's asking. That's not the point."

The point, she says, is the city needs to count its purse. It should put money on the table only when that money will move the game forward, and it should keep its money in the purse if giving it away won't do any good.

She said: "The one thing that I've never changed about as a journalist and a council member and as mayor: At some point I just think you turn the tap off, and I have a really strong gut check for when that is."

When?

"I just always go back to that but-for test. But for this subsidy, this blighted part of town wouldn't turn around."

She says the Fairfield project--on land that has already turned around and was ardently sought by three major developers--doesn't qualify. The city doesn't need to offer anybody an incentive to develop that land. Everybody wants to anyway.

Here's where we get to Sleeper and his partner Don McNamara. In the early 1980s the old Southland Corp., still locally controlled by the Thompson family, acquired a huge amount of land in the Haskell-Lemmon Avenue-Central Ex-pressway area which it intended to develop as a closer-in Las Colinas-style new downtown.

The venture went belly-up, and the land lay fallow and bleak for years. In 1990 McNamara and Sleeper bought up all of that screwed-up land. Two years later they talked the city into giving them their own "tax increment finance district," called the Cityplace TIF. It made sense.

Normally, a developer has to pay to build the new streets and sewers in his development, to say nothing of paying property taxes to help defray the extra police and fire protection and other services the city is obligated to provide him. In a TIF, the city says: "Look, we know nobody wants to lay out all that money to develop here, because it's a dicey area, and the risk is too big. So here's what we'll do. You go ahead and pay for all the new streets, etc., as usual. And you pay your taxes, as usual. But we'll keep all the tax money you pay us in a special account. And when we get enough cash in there, we'll pay some of it back to you to help cover the costs of public infrastructure that you have already installed." It's a way to help lay off the risk.  

Anybody would agree the Cityplace TIF has been a galloping success. Where fallow ground lay 13 years ago--to an old guy like me that's a snap of the fingers--the whole area is now glistening and bristling with really cool, sophisticated development, the kind of stuff that makes a city feel like a winner, not a loser.

Sleeper told me last week how much property value the Cityplace TIF has added to the city tax rolls: "When we started out, the tax base was $45 million," he said. "On the last tax roll, which was January 1 of 2005, it was valued at $315 million, so that's about seven times where it started.

"We think today if you took a snapshot and valued it, it's probably closer to $400 million. And if we're allowed to complete the project out as we planned, we think by the time we turn it back over to the taxing jurisdiction, it will be somewhere in the neighborhood of a billion dollars."

Not bad, eh? You have to take your hat off to that.

So here's where Ryan Evans' point of view comes in. I guess. I'm having to use my imagination a little, because Evans wouldn't call me back, in spite of my multiple fervent attempts to reach him last week. Another highly placed official at City Hall explained to me that Evans doesn't "see any future" in talking to me. Sheesh. It's not like I was gonna propose to the guy.

Evans is telling council members the original deal was that the TIF could collect $45 million total over its life and give the money to developers as incentives. He thinks we shouldn't change the deal in midstream.

The mayor wants to declare the Cityplace TIF a success right now, shut it down and put the rest of its planned revenue into the city's general fund.

We're not just talking about the $3 million for the condo tower. Evans gave the mayor numbers last week showing that the TIF, which has already taken in $24.6 million, will collect another $18.2 million if it keeps running.

Let me try to put the money in context for you. I mentioned how the city can't even afford to keep the medians mowed these days. The $18 million Miller wants to save for the city is three times the current annual budget for mowing.

It's more than the police department spends in a year to investigate murder, rape, aggravated robbery and all other crimes against persons. It's more than 10 times what the city has in the current budget to repair curbs, gutters, alleys and potholes in downtown, Deep Ellum, Uptown and the Cedars.

And, by the way, we are facing a very significant tax hike ahead if the voters approve the upcoming bond package. "We are giantly jacking up property taxes with this bond program," Miller said. "In a giant way. Just remember this number: 21.7 percent increase in property taxes over the next six years if the voters say yes to the bond program."

She breaks it down like this: 14.7 percent to pay off the bonds; raise that to 16.2 percent when you hire the people to run and work in the new facilities built with the bond money; jack the total tax increase up to 21.7 percent when you hire the additional cops the council has vowed to add to the force.

On a $300,000 house, that's roughly $480 more in city taxes a year, or, as those of us with orthodontic issues might think of it, half a crown. If I were the reporter I yearn to be, I could tell you how many more people you should expect to see walking around town with blacked-out teeth under this new tax rate.

It's money. OK? And what I hear Miller telling the council is: We need to save our pennies. For this, they will accuse her of being an anti-business devil-spawn witch. Not Neal Sleeper, he's too much of a gentleman for that. But others will.

My sources tell me the city attorney will brief the council soon and tell them there is no legal obligation to give Sleeper and his partners the $3 million for the condo tower and nothing to stop the city from shutting down this or other TIFs when they reach the success mark. Citing attorney-client confidentiality, City Attorney Tom Perkins declined to comment to me on it, but I know what he's going to say.  

How many people with blacked-out teeth do you think are going to live in those condos? None. I'll tell you where they'll be. On my block. We'll all be out on our lawns spitting on each other. And with my missing choppers, Ryan Evans will never see a future in me!

I say mind the purse.


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